Revenues, income both up for NRP

INCREASED coal prices and higher production levels at its mines have left master limited partnership Natural Resource Partners with record revenue and net income in the first quarter.
Revenues, income both up for NRP Revenues, income both up for NRP Revenues, income both up for NRP Revenues, income both up for NRP Revenues, income both up for NRP

NRP president Nick Carter

Donna Schmidt

For the period ended March 31, the Texas company's earnings were $US25.9 million, a jump of 46% over the $17.8 million recorded from last year’s corresponding quarter. Revenue rose 28% to $64.1 million, compared to $50.2 million reported in 2007.

NRP enjoyed a 7% increase in production as well, up to 14.5 million tons in the first quarter. The spike was led by its owned properties in the Illinois Basin and the northern Powder River Basin, as it noted Appalachia was "virtually flat".

Metallurgical coal production accounted for 37% of the company's coal royalty revenues and 28% of production over the period.

Specifically, coal royalty revenues were up 20% to $49.2 million from last year's total of $41 million thanks to increased revenues per ton, which increased to $3.40 per ton in the first quarter of the year over 2007's initial quarter royalty level of $3.03/t.

“In the Illinois Basin, the longwall at the Williamson mine came on production late in the first quarter and is projected to generate higher production volumes in future quarters," noted NRP officials.

The MLP said a larger chunk of its revenues, 23%, came from sources other than coal royalties, versus 18% of the total reported in the first period of 2007.

Some other revenue-diversifying resources included coal processing and transportation fees, rentals, overriding royalties and wheelage payments.

NRP president Nick Carter said that times are "exciting" right now for those involved in the industry.

“Coal prices continue to improve month over month and since our royalty structure is based on top line sales price and not margin, we benefit proportionally as our lessees' sales prices increase,” Carter said.

“We believe that world economic indicators point toward higher global coal demand and a supply shortfall, which bodes well for the US coal industry and NRP."

Company chief financial officer Dwight Dunlap added that NRP's performance going forward this year will be better than forecast.

“However, due to the still fluid coal pricing situation we do not have sufficient current information from our 66 lessees to allow us to quantify an increase in our guidance at this point," he said, adding that NRP anticipates updating guidance with the second-quarter earnings report in August.